The harmless observations of Ugandan, Paul Busharizi. Is it me or are we missing something here?

Wednesday, September 3, 2014

IS ECONOMIC PLANNINGA FUTILE ENDEVOUR?

Two weeks ago from atop Kampala’s roof Professor Brian van
Arkadie held sway over a meeting of the Oxford & Cambridge Society if
Uganda.

The subject was “A perspective on economic planning in
Sub-Saharan Africa” and the venue was the hilltop residence of the bank of
Uganda governor Emmanuel Tumusime-Mutebile’s official residence – from that
height Kampala looks like a forest.

Van Arkadie, a former chief planning economist in Uganda
just after independence was uniquely qualified to speak on the subject. His experience
as a planner in Kenya and Tanzania as well as Vietnam and the Baltic states,
just before the fall of the iron curtain, allows him an interesting perspective
on what it takes to plan economies from the ground up.

I came away from his talk, which was laden with anecdotes
from his time advising this or that government, with two thoughts; one, a reaffirmation
of the thinking that all economic plans have to take into account the political
context in which they are situated. That it’s all very nice to want take off
like Dubai or gallop like Singapore, but their economic trajectories had a lot
to do with their political environment which do not mirror our own.

The second thing was the “revelation” that Uganda has had
three and not two national development plans – 1962 and 1966 . The first and
least known was one drawn up in 1946 by Edgar Barton Worthington, whose other
publications are listed as “The ecological century” and “Science in Africa”.

Van Arkadie said that apart from being an obscure document
--- long serving finance ministry officials have only heard about it, the 1946
plan was unique for two other reasons; it was drawn up by a scientist and
secondly, it was the only plan that worked. Van Arakdie supposed that it worked
because the colonial government was essentially dictatorial and could ram
through such components of the plan as the creation of the Uganda Development
Corporation and Owen Falls Dam, with next to no sensitivity to the local
politics.

Van Arkadie’s humility was therefore understandable. He
would probably be the first to admit that after decades of planning economies,
the one thing he has learnt is that the best laid plans of mice and men often
go awry.

His criticism of the World Bank and not the International
Monetary Fund (IMF) was also telling. Of the former he had no kind words,
criticising their development plans, some of which he had seen
copied-and-pasted from one country to the next. The IMF, which insists on
stabilising economic environments as an anchor for future progress he said, was
the right thing to do however painful.

So what then did he think was the role of the government in
planning economies? He thought macroeconomic stability and strategic planning
would be a government’s key functions.

Macro-economic planning where holding inflation down,
containing budget deficits and ensuring a current account balance were critical
for anything meaningful to be planned into the future. Strategic planning would
inform strategic interventions to change or shift away from current situations
by tweaking the fundamentals, so for example Uganda’s decision in the 1990s to
shift away from state control to a liberalised economy.

And finally he counselled that whereas speed is desirable
there are somethings that cannot be speeded up but are crucial for the long
term health of economies. The civil service for instance, he suggested would
take at least 40 years before it matured into its full role as an effective
enabler of the economy.

Despite the shortcomings planning has a role to play in a
rapidly changing and democratic world, but while there is a need to have long
term goals, the means by which these will be achieved will need to be flexible
to keep up with an environment that is ever in a state of flux.

Lee Kuan Yew in his book “From third world to first: The
Singapore story” could serve as the real life example for Van Arkadie’s talk.
When Lee Kuan Yew and his counterparts took over the helm of Singapore’s
politics they had one strategic goal in mind, to see their own citizens within
50 years, enjoy a UK standard of living.

How they did it, often having to eject old thinking, change
course, suffer numerous reversals and even face down real threats to the small
island’s very existence, is a study in how a nation by keeping its eye on the
ball can reach can lift itself from the direst of circumstances.

However a nation can have a compelling long term vision but
is let down by the soft infrastructure, things like common commitment,
diligence, transparency and accountability.

It would be easy to keep hope alive if one knew that a
better standard of living was the natural end point of a development process,
and that while some people may take 25, 50 or even 100 years the end is guaranteed.
But it is not.

Nature tends to revert to a disorderliness, in the absence
of external stimuli to order it.

So while planning may seem futile in as far as nations cannot
get exactly what they want, it provides direction for the energy of the various
players and improves the chances of success, because as they say failing to plan is
planning to fail.